Free Newsletters - Space - Defense - Environment - Energy - Solar - Nuclear
..
. Earth Science News .




TRADE WARS
Outside View: Trade deficit rises
by Peter Morici
College Park, Md. (UPI) Sep 11, 2012


disclaimer: image is for illustration purposes only

The U.S. Commerce Department reported Tuesday that the U.S. deficit on international trade in goods and services was $42.0 billion in July, up slightly from $41.9 billion in June.

Imported oil and subsidized imports from China account for nearly the entire $500 billion trade gap and pose the most significant barriers to robust growth and jobs creation.

The trade deficit on oil moderated a bit as economic activity slowed and prices fell from earlier in the year but the trade gap with China continues to increase and now exceeds $350 billion on an annual basis.

The economic recovery began five months after President Barack Obama took office, and gross domestic product growth has averaged 2.2 percent. In October 2009, unemployment peaked at 10 percent but has fallen to 8.1 entirely because fewer Americans are seeking work.

Ronald Reagan inherited a similarly troubled economy with unemployment cresting at 10.8 percent early in his presidency. When he sought re-election, the economy was growing at 6.3 percent, unemployment was 7.3 percent and a rising percentage of Americans were seeking work.

The U.S. economy suffers from too little demand. Consumers are spending, but too many dollars go abroad to pay for Middle East oil and Chinese goods that don't return to buy U.S. exports. Businesses remain pessimistic and don't hire.

Reagan encouraged the development of natural resources and endured much criticism from environmentalists and academics. Whereas Obama has talked repeatedly about developing the full range of energy resources but has bent to their pressure and imposed counterproductive limits on oil production in the Gulf of Mexico, off the Pacific and Atlantic coasts and Alaska. Merely replacing domestic oil with imports does little to improve air quality or curb carbon dioxide emissions.

These policies are premised on faulty assumptions about the immediate potential of electric cars and unconventional energy sources -- the failures of the government-subsidized Chevy Volt and Solyndra are two of many examples of failed government investments in alternative energy projects premised more on hope than solid business plans.

In combination, curbs on domestic conventional oil production and squandered resources on alternative technologies not yet ready for commercial application make the United States much more dependent than necessary on imported oil and destroy jobs by the millions.

Oil imports could be cut by two-thirds by boosting U.S. oil production to 10 million barrels a day and immediately implementing more feasible solutions like the aggressive use of natural gas in fleet vehicles and more fuel efficient internal combustion engines.

To keep Chinese products artificially inexpensive on U.S. store shelves, Beijing undervalues the yuan through government intervention in currency markets. It pirates U.S. technology, subsidizes exports and imposes high tariffs on imports.

Reagan was a forceful advocate for U.S. economic interests with the pre-eminent rivals of his day, like Japan. Whereas Obama, like President George W. Bush, has sought to alter Chinese policies through endless pleadings and negotiations.

Beijing offers token gestures, knowing Obama won't take the strong actions, advocated by economists across the ideological and political spectrum, to force China to abandon its mercantilist policies. It successfully cultivates political support for the American policy of appeasement among large U.S. multinationals and banks doing business and profiting from mercantilism in the Middle Kingdom.

Cutting the trade deficit by $300 billion, through domestic energy development and conservation, and forcing China's hand on currency manipulation and other protectionist practices would increase GDP by about $500 billion a year and create at least 5 million jobs.

Longer term, large trade deficits shift resources from manufacturing and service activities that compete in global markets to domestically focused industries. The former undertake much more research and development and investments in human capital.

Cutting the trade deficit in half would raise U.S. economic growth by 1-2 percentage points. But for the trade deficits of the Bush and Obama years, U.S. GDP would be 10-20 percent greater than it is today, per capital income as much as $5,000-$10,000 higher and unemployment not much of a problem.

(Peter Morici is an economist and professor at the Smith School of Business, University of Maryland, and widely published columnist.)

(United Press International's "Outside View" commentaries are written by outside contributors who specialize in a variety of important issues. The views expressed do not necessarily reflect those of United Press International. In the interests of creating an open forum, original submissions are invited.)

.


Related Links
Global Trade News






Comment on this article via your Facebook, Yahoo, AOL, Hotmail login.

Share this article via these popular social media networks
del.icio.usdel.icio.us DiggDigg RedditReddit GoogleGoogle




Memory Foam Mattress Review
Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News





TRADE WARS
Burberry value rocked by profit warning amid China slowdown
London (AFP) Sept 11, 2012
Shares in luxury clothing and accessories group Burberry tumbled by almost 21 percent Tuesday after the British firm issued a surprise profits warning which analysts blamed on China's economic slowdown. Analysts warned that the group's poor second quarter could signal that the high-end luxury goods industry was no longer immune to weakness in the global economy, as Burberry's shock announcem ... read more


TRADE WARS
Norway supplies $168M for famine relief

Haunting 'Land of Hope' part shot on location in Fukushima

Japan slams brakes on $63 billion in spending

25 killed in ammunition depot blast in western Turkey: army

TRADE WARS
SciTechTalk: Tablet wars heat up

System will seek orbiting space debris

Apple unveils thinner, more powerful iPhone 5

Zuckerberg eyes mobile after Facebook IPO flop

TRADE WARS
Australian super-trawler ban in doubt

Australia acts to stop super-trawler

Lake, not quake, source of Californian bad smell

Deep-Sea Crabs Seek Food Using Ultraviolet Vision

TRADE WARS
Sailboat navigates once-frozen Arctic waterway

Glacial thinning has sharply accelerated at major South American icefields

Russia charges Greenpeace activists in polar bear protest

Russia's unique economic position in the Arctic

TRADE WARS
Turf study to monitor runoff, establish fertilizer management practices

China probes claims children fed modified rice

Wild bees: Champions for food security and protecting our biodiversity

US fruit giant Dole settles 38 pesticide complaints

TRADE WARS
N. Korea refuses S. Korea's flood aid

Japan tsunami 'miracle pine' cut down, preserved

18 months on 2,800 still missing in Japan disaster

Istanbul and the earthquake risk of a megacity

TRADE WARS
Malema mocks S.African 'high alert' for military bases

Zimbabwe wildlife ranchers warn on Mugabe party takeovers

Mali coup leader 'in sync' with govt on reclaiming north

Nigeria trains more peacekeeping troops

TRADE WARS
Mapping a genetic world beyond genes

UC Santa Cruz provides access to encyclopedia of the human genome

Researchers identify biochemical functions for most of the human genome

Major advances in understanding the regulation and organization of the human genome




The content herein, unless otherwise known to be public domain, are Copyright 1995-2014 - Space Media Network. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. Privacy Statement